Post Views: 656 Peter Amangbo, chief executive of Zenith Bank Plc, on Monday told an investor conference call that it made a provision on 30% of its l...
Peter Amangbo, chief executive of Zenith Bank Plc, on Monday told an investor conference call that it made a provision on 30% of its loan to telecommunication giant- 9mobile (formerly known as Etisalat Nigeria).
Primary regulators- Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) of the nation’s banking and telecommunications industries, in July intervened to save Etisalat Nigeria from collapse over a $1.2bn four-year old debt to a consortium of 13 banks. The intervention shielded the company from being placed on receivership by the banks, prompting a pullout by the company’s core investors- United Arab Emirates’ Etisalat and Mubadala Development Company, which together controlled 85% stake in the company. This was followed by the resignation of Hakeem Belo-Osagie, chairman of Etisalat Nigeria, who had the remaining 15% stake, resulting in dissolution of the company’s board and management and the subsequently name change as demanded by the Emirati core investor.
The local banks which participated in 9Mobile’s loan deal are: Zenith Bank GTBank, First Bank, UBA, Fidelity Bank, Access Bank , Ecobank, First City Monument Bank , Stanbic IBTC Bank and Union Bank.
Failure to repay the $1.2bn loan was blamed on a currency crisis and a recession in Nigeria.
Reuters quoted Amangbo as telling the conference call: “We have taken about 30 percent … as a provision which we believe is very prudent as the company is undergoing restructuring … to prepare for a new investor.”
Although Zenith Bank declined to disclose its total exposure to the telecoms group, Reuters quoted a source familiar with the matter as saying Zenith Bank is the largest lender to 9Mobile.
The bank, last week presented its audited half-year result to the Nigerian Stock Exchange (NSE) showing a Profit Before Tax of N92.18bn, compared to the previous N53.91bn.
The bank’s shares were down 1.05% on Monday. Zenith Bank had announced a 0.25 naira dividend payout with its half-year results, which disappointed the market.